US gasoline costs drop amid cheaper crude oil

The cheapest crude since January has refiners producing fuel at record rates, helping lower the cost of gasoline at pumps across the country, according to a new survey.

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By JESSICA SUMMERS and DAN MURTAUGH

Bloomberg

The cheapest crude oil since January has refiners producing
fuel at record rates, helping lower the cost of gasoline at
pumps across the country.

The average price for regular gasoline at US pumps dropped
4.21 cents in the two weeks ended Aug. 22 to $3.4785/gal,
according to Lundberg Survey. The average is based on
information obtained at about 2,500 filling stations by the
Camarillo, California-based company. Prices are 8.01 cents
lower than a year ago, the survey showed.

Retail prices dropped as West Texas Intermediate crude
futures fell below $94/bbl. US refiners are processing the
most petroleum for this time of year in records dating back
to 1989.

Its crude oil at work, Trilby Lundberg, the
president of Lundberg Survey, said in a telephone interview.
The down factors outweighed the up factors. One of the
many factors include robust US oil production.

The highest price for gasoline in the lower 48 states among
the markets surveyed was in San Francisco, at $3.92/gal,
Lundberg said. The lowest price was in Jackson, Mississippi,
where customers paid an average $3.11/gal. Regular gasoline
averaged $3.66/gal on Long Island, New York, and $3.79 in Los
Angeles.

Cheap Crude

West Texas Intermediate crude, the US benchmark priced in
Cushing, Oklahoma, fell $4, or 4.1%, to $93.65/bbl on the New
York Mercantile Exchange in the two weeks to Aug. 22.
Its the lowest settlement since Jan. 14.

Refineries processed 16.42 million bpd in the week ended Aug.
15, the highest level for mid-August in Energy Information
Administration records dating back to 1989. Refinery inputs reached a record
16.63 million bpd on the week of July 11.

On the Gulf Coast, home to more than half of the
nations refining capacity, rates rose to
8.74 million bpd the week of Aug. 15, the highest level on
record.

Plants are taking advantage of the US shale boom, which has
raised oil production 64% in the past five years. The
increased output has pushed the settlement price of US
benchmark WTI futures below European Brent every day since
Aug. 17, 2010.

Gasoline futures on the Nymex slipped 1.53 cents, or 0.6%, to
$2.7384/gal in the two weeks ended Aug. 22.

Gasoline stockpiles grew 585,000 bbl to 213.3 million, EIA
data show. Demand over the four weeks ended August 1 was
9.016 million bpd, 2% below a year earlier.

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